Shares of Canopy Growth Corp (TSX:WEED) were up 0.97% at the bottom of the noon hour on October 3. The stock is up 27.6% month-over-month as cannabis stocks contributed to a surge in the S&P/TSX Index. This was mostly due to Canadian provinces making real progress on respective sale and distribution plans. In September Ontario announced it would sell cannabis through government storefronts and aim to open 40 of these stores in 2018.
Canopy Growth signed a Memorandum of Understanding to supply New Brunswick with several million grams of cannabis and cannabis products in the first year of legalization. The products are expected to have a retail value of $40 million in the first year. Canopy Growth also moved to expand into Europe as it established a partnership with Spectrum Denmark ApS. Denmark has also passed legislation for legal cannabis sales to commence on January 1, 2018.
Canopy Growth has regained momentum after a disappointing spring and summer in which internal government debate brought anxiety to investors. Now the July 2018 deadline set by the federal government appears to be realistic and cannabis producers are off to the races.
Producers could still experience some headaches as provincial governments roll out legalization. Critics have pointed to the inability of the government to meet initial demand, which could mean stiff initial competition from the black market. Still, as a long-term play, cannabis stocks appear to be a sure a bet as investors have as far as growth stocks are concerned.
